Crude oil futures finished modestly higher Thursday, than ramped up after-hours following a report that Iran is preparing to attack Israel from Iraqi territory in the coming days.

Israeli intelligence believes Iran is preparing to carry out its attack using a large number of drones and ballistic missiles through pro-Iran militias in Iraq, Axios reported.

Such an attack would raise the possibility of a strong response from Israel that could include Iranian oil infrastructure.

Crude oil jumped as much as 3% on the news before pulling back, currently up less than 2%; front-month Nymex crude for December delivery (CL1:COM) had settled +0.9% in regular trading to $69.26/bbl, and front-month December Brent crude (CO1:COM) ended +0.8% at $73.16/bbl.

Meanwhile, front-month Nymex natural gas (NG1:COM) for December delivery finished -4.8% to $2.707/MMBtu, as a lack of weather-driven demand outweighed a weekly storage report that came in at the low end of forecasts, with gas inventories up 78 Bcf to 3,863 Bcf, according to the U.S. Energy Information Administration.

For the month of October, WTI added 1.6% to snap a three-month losing streak, and Brent rose 1.9%, but U.S. natural gas sank 7.4%.

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Oil futures already had gained ground after China reported manufacturing expanded up in October for the first time in six months, possibly indicating that government stimulus measures are having an effect.

U.S. crude and products inventory withdrawals and the possibility of OPEC+ again postponing output increases planned for December.

The possibility that OPEC+ would postpone a planned oil production increase also supported prices; Reuters reported Wednesday that a decision could come as early as next week.

Also, U.S. oil production rose 1.5% in August to a monthly record high of 13.4M bbl/day, topping the prior record 13.31M bbl/day in December 2023, the EIA reported.

August output in Texas increased 1.7% to a record 5.82M bbl/day, and output in New Mexico jumped 2.8% to a record 2.09M bbl/day.